Herring files third lawsuit in multistate generic drug price-fixing conspiracy

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Attorney General Mark Herring today joined a multistate coalition filing the third lawsuit stemming from an ongoing antitrust investigation into a widespread conspiracy by generic drug manufacturers to artificially inflate and manipulate prices, reduce competition, and unreasonably restrain trade for generic drugs sold across the United States.

The new complaint, filed in the U.S. District Court for the District of Connecticut, focuses on 80 topical generic drugs that account for billions of dollars of sales in the United States.

“These drug companies chose profit over keeping people safe and healthy,” Herring said. “Too many Virginians know the struggle of paying incredibly high drug prices, and in many cases the generic alternative may not have offered a lower-cost alternative because of this alleged price fixing.

“Virginians should never have to choose between paying for critical medication or paying for food, rent or utilities because of artificially inflated prices. My colleagues and I will continue to combat illegal price fixing in the generic drug market and hold drug companies and decision makers accountable.”

The complaint stems from an ongoing investigation built on evidence from several cooperating witnesses at the core of the conspiracy, a massive document database of over 20 million documents, and a phone records database containing millions of call detail records and contact information for over 600 sales and pricing individuals in the generics industry.

Among the records obtained by the states is a two-volume notebook containing the contemporaneous notes of one of the States’ cooperators that memorialized his discussions during phone calls with competitors and internal company meetings over a period of several years.

Between 2007 and 2014, three generic drug manufacturers, Taro, Perrigo, and Fougera (now Sandoz) sold nearly two-thirds of all generic topical products dispensed in the United States. The multistate investigation has uncovered comprehensive, direct evidence of unlawful agreements to minimize competition and raise prices on dozens of topical products.

The complaint alleges longstanding agreements among manufacturers to ensure a “fair share” of the market for each competitor, and to prevent “price erosion” due to competition.

The complaint is the third to be filed in an ongoing wide-ranging multistate antitrust investigation of the generic drug industry. The first complaint, still pending in the U.S. District Court in the Eastern District of Pennsylvania, was filed in 2016 and now includes 18 corporate Defendants, two individual Defendants, and 15 generic drugs.

Two former executives from Heritage Pharmaceuticals, Jeffery Glazer and Jason Malek, have entered into settlement agreements and are cooperating with the attorneys general working group in that case.

The second complaint, also pending in the U.S. District Court in the Eastern District of Pennsylvania, was filed in 2019 against Teva Pharmaceuticals and 19 of the nation’s largest generic drug manufacturers.

 


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